The Company expects to continue to return value to its shareholders through a combination of share repurchases and dividends. Market conditions and our financial performance will dictate the amounts and allocation between these vehicles.

     The following table summarizes our contractual obligations as of December 31, 2004

	Payment due by period
					Less than												More than
Contractual Obligations	Total			1 year			1-3 years			3-5 years			5 years
	(in millions)
Long-term debt (1)	$	352.5		$	17.3		$	14.6		$	320.6		$	—
Operating lease obligations		43.0			10.8			10.3			7.8			14.1
Purchase obligations		2.2			2.2			—			—			—
Other long-term liabilities		38.8			—			19.1			2.0			17.7
Total contractual cash obligations	$	436.5		$	30.3		$	44.0		$	330.4		$	31.8

     The Company believes that cash flows from operations and available financing capacity are adequate to meet expected future operating, investing and financing needs of the business.

     Off Balance Sheet Arrangements: The Company has a $3.0 million letter of credit issued as support for construction and permanent financing of a franchisee’s Sleep Inn and Mainstay Suites located in Atlanta, Georgia. No amounts were drawn against this letter of credit as of December 31, 2004. The letter of credit expires in April 2005.

     Inflation: Inflation has been moderate in recent years and has not had a significant impact on our business.

Critical Accounting Policies

     Our accounting policies comply with principles generally accepted in the United States. We have described below those policies that we believe are critical and require the use of complex judgment or significant estimates in their application. Additional discussion of these policies is included in Note 1 to our consolidated financial statements.

Revenue Recognition.

     We recognize continuing franchise fees, including royalty, marketing and reservations fees, when earned and receivable from our franchisees. Franchise fees are typically based on a percentage of gross room revenues of each franchisee. Our estimate of the allowance for uncollectible royalty fees is charged to selling, general and administrative expense.

     Initial franchise and relicensing fees are recognized, in most instances, in the period the related franchise agreement is executed because the initial franchise fee is non-refundable and the Company has no continuing obligations related to the franchisee. We defer the initial franchise fee revenue related to franchise agreements which include incentives until the incentive criteria are met or the agreement is terminated, whichever occurs first.

     We account for partner services revenues from endorsed vendors in accordance with Staff Accounting Bulletin No. 104, (“SAB 104”) “Revenue Recognition.” SAB 104 provides guidance on the recognition, presentation and disclosure of revenue in financial statements. Pursuant to SAB 104, the Company recognizes partner services revenues when the services are performed or the product delivered, evidence of an arrangement exists, the fee is fixed and determinable and collectibility is probable. We defer the recognition of partner services revenues related to certain upfront fees and recognize them over a period corresponding to the Company’s estimate of the life of the arrangement.